Garmin reports 2Q results

Posted on August 3rd, 2011

Garmin today reported a drop in revenue for the second quarter, although marine segment revenue increased 6 percent.

The company reported total revenue of $674 million, down 7.5 percent from $729 million in the second quarter last year. Automotive/mobile segment revenue dropped 19 percent, but the companys other segments saw revenue growth.

Revenue in the marine segment was $79 million, the company reported.

Profits fell 19 percent for the quarter, which ended June 25. Garmin reported earning $109.5 million, or 56 cents a share, compared with $134.8 million, or 67 cents a share, a year earlier. Excluding currency effects and other items, earnings fell 26 percent, to 63 cents a share, from 85 cents a share.

For the year to date, Garmin reported revenue of $1.18 billion, up 2 percent from $1.16 billion in 2010. Marine segment revenue increased 13 percent, to $130 million.

In the second quarter, revenue was slightly ahead of our expectations and we delivered strong free cash flow generation, but margins fell short, driven by increased deferral of high-margin revenues associated with bundled product offerings and increased operating costs due to bad debt and legal expenses, chairman and CEO Min Kao said in a statement.

The marine segment posted revenue growth of 6 percent, with our new series of echo fishfinders doing well in the market, he added. These products have a lower margin profile than our chart plotters and networked solutions, which has put some pressure on the operating profit of the segment. We expect the margins to improve as product mix normalizes throughout the remainder of the year.